US is right to order banks to reveal bonuses

Monday 2 March 2009 08:48 BST

They do things differently in America. New York's top legal officer has demanded Bank of America chief Kenneth Lewis hand over the names of the Merrill Lynch executives who received 2008 bonuses, and how much they got, before the bank's takeover of the firm in January. New York Attorney General Andrew Cuomo also demanded former Merrill chief executive John Thain testify for a second time over $3.6 billion (£2.5 billion) in bonuses. "I answered all the questions to the best of my knowledge and hopefully brought some clarity," Lewis said after he gave evidence to Cuomo's team.

In the UK, it is impossible to discover who earns what unless they are company directors. Most bonuses, even in banks that have been bailed out by the taxpayer, remain a closely guarded secret.

* The knives have been out for Lord Myners almost since he was appointed City minister last October. One story that was told with relish by his critics was that Myners, who used to sit on the board of NatWest, was involved in setting remuneration policy, which was then adopted by Royal Bank of Scotland when it took over the bank. In fact, he didn't even sit on the remuneration committee, and resigned in 1999 before RBS took the bank over. But Myners and Gordon Brown may both reflect that as a former NatWest board member, he might not have been the best person to negotiate with Sir Fred Goodwin over his exit package last autumn...

* NatWest was eventually sold to RBS in 2000 for £21.4 billion. To put that in perspective, RBS ran up a bigger corporate loss of £24 billion in just one year in last week's dire annual results.

Pride before the fall at RBS

Any guesses who said this and when? "We have a great deal to do in 2008. Markets will continue to be demanding and we have a major integration to deliver. But we also have an unparalleled set of opportunities and their realisation will allow us to continue on the impressive growth trajectory that has characterised RBS over the past decade." Yes, that's former chairman Sir Tom McKillop in his annual report for RBS in 2007...

* New nickname for Sir Fred "the Shred" Goodwin: Fred the Shedload.

* Just think that if the Government had let RBS go bust, the pension scheme would have ended up in the Pension Protection Fund and Goodwin would be getting only £25,000 a year.

* Sir Christopher Bland, the former BT and BBC boss, was once tipped to run RBS, a role he said he would have dearly loved — although now he must be thanking his lucky stars that the job eluded him. It would, however, have reunited him with his former home, because among the bank's mountain of debt is the multi-million-pound mortgage on Abbots Worthy House, on the outskirts of Winchester, where Sir Christopher and his wife Jennifer lived in the 1990s. Jennifer, the former Viscountess Enfield, ran a nursery school from the manor house, which they sold in 1995. The new owners kept it going until their divorce last year. The £3 million home was repossessed soon after, and has lain empty and unsold for months.

No smoke without fire, Michael

ITV head Michael Grade can be forgiven for feeling reluctant to face the press. On Wednesday, he is due to unveil the broadcaster's annual results, which are widely expected to be a disappointment. Scottish broadcaster STV, which broadcasts on the ITV1 channel north of the border, has already forecast revenues will fall 21% in the first quarter of 2009 — which does not augur well for ITV1.

So City Spy is not entirely unsurprised to learn that this year Grade won't be holding the usual ITV press conference on results day. Instead, he and other senior executives will field questions on a conference call, thus avoiding any awkward face-to-face confrontations in front of the TV cameras.

Everyone is being so pessimistic about ITV that the broadcaster might yet surprise with halfway decent figures.

But it doesn't look like Grade is betting on it...

So farewell... the City says goodbye to a beloved friend

An obituary crops up on financial gossip website HereistheCity, which announces "with great sadness" the loss of a "beloved friend", an "inspiration to many of us" who "lifted us from mediocrity to excellence".

The deceased is described as having "touched the lives of hundreds of thousands in a remarkable fashion", although "in the later stages of his life many of his friends were found to be involved in a global network of fraud, dodgy dealings and other misdemeanours".

And the identity of this colourful character? Er, the City bonus. "Survived by his modest long-term partner, the base salary, he will be sorely missed" — by some, certainly.

* Opposition MPs have been fulminating about RBS and debts, but the bank has a little-known link to the Tory leadership. Desmond Swayne MP, who is David Cameron's parliamentary private secretary, disclosed that until 12 years ago he worked in risk management at RBS. "Ah!" said Labour MPs, "it all starts to make sense." Swayne hit back with gusto, insisting that the rampant extravagance at RBS "would never have happened on my watch".

* Meanwhile, another MP seems to be (understandably) confused by all the acronyms in the banking crisis – HBOS, RBS, FSA, etc. Andrew Mackinlay, Labour MP for Thurrock, was making an attack on Goodwin when he managed to mention "the RSPB group". Those bankers, they're odd birds.

* It's all go at the home of Mark Brumby, the Blue Oar analyst for the leisure, pubs and travel sector. "We've now got nine guinea pigs," he writes in his morning bulletin. "We started off with three and we were promised they were all girls but they obviously weren't and now, after quite a lot of Bohemian pig-on-pig action, here we are." Crumbs.